Stricken TV producers open insolvency toolkit

April 16, 2024

The ripple effects of a sector’s global downturn will often continue to hurt small operators for long after the big players have steadied themselves. The TV industry, with a long tail of independent suppliers, is a sad example close to home.

Recent weeks have seen a number of UK producers enter various insolvency processes, forced ultimately by the worldwide slump in commissioning. Factory Transmedia, which had led a revamp of classic children’s show The Clangers, as well as producing animation for Disney and CBBC, has announced a Creditors’ Voluntary Arrangement. Zig Zag Productions, maker of Fox’s I Wanna Meet Harry, has appointed administrators after three shows were delayed amid uncertain market conditions. In February, famed producer RDF closes its doors after more than 30 years in business.

After separate long strikes last year by actors and writers in the US, the film and TV industries dusted themselves down and started again – but not necessarily as before, not least in the UK.

Uncertainty over who can work, and who can and can’t cross picket lines, prompted considerable financial instability in an already fragile media sector, as well as squeezing other forms of studio-produced content.  Downstream from writers and actors, related areas of the wider media industry suffered reverberations  which have been slow to subside. UK workers have struggled to pay rent and some small production businesses have already shut down.

Pay aside, actors and writers fear the potential impact of Artificial Intelligence replacing their talents and expertise. A survey for Bectu, the British union for workers in behind-the-scenes roles in creative industries, said that 80% of its 4,000 members had been affected by the strikes, with three-quarters not working at all during the period.  UK commercial broadcaster ITV warned that the global content market has been impacted by lower demand from free-to-air broadcasters, reflecting the challenging advertising environment, as well as the US strikes. A significant chunk of the industry’s revenue has been bumped from 2024 into 2025.

Studio productions are dictated by long, complex schedules, so delays are felt for a long in supporting businesses. The enforced surge in TV watching during Covid underlined the increasing importance and value of ‘content’ – programmes, box sets and movies for both on-demand streaming businesses and terrestrial channels. The virus provided a silver lining for streamers themselves, boosted by captive audiences swelling subscriptions; however, previously booming producers of content were hit hard by the logistical challenges of filming, leaving them unable to deliver projects despite strong demand from studios and TV companies. In many ways, UK participants in a global media industry are back to square one.  Other industries facing their own problems might be relieved that there’s no business like show business.

In the Buchler Phillips spirit of ‘work out, not bail out’, it may not be too late for many troubled production companies to improve their longevity until industry conditions improve. Management teams should make best use of professional advice available to address the potential keys to survival:

  • Assisting in communications and negotiations with lenders
  • Reviewing financial aspects of contracts in conjunction with agents and lawyers
  • Advice on royalty payments and profit share
  • Treatment of Intellectual Property and intangible assets
  • Advice on structuring strategic alliances and major contracts
  • Due diligence on potential transactions
  • Reviewing and optimising cost bases – permanent and freelance staff; properties
  • Supporting grant applications to arts bodies

Written by Anoushka Desai, Senior Analyst at Buchler Phillips, a UK based independent boutique firm with an impeccable Mayfair heritage, specialising in corporate recovery, turnaround, restructuring and insolvency.

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